UPDATE 1-Algeria's Sonatrach chief urges oil industry reforms

Reuters Staff

(Adds more details from CEO, background)

By Lamine Chikhi

ALGIERS, Sept 18 (Reuters) - Algeria needs to change the
laws governing its oil and gas industry to attract foreign oil
investors, the chief of the country's state-run Sonatrach energy
company said on Monday.

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Sonatrach CEO Abdelmoumen Ould Kaddour's comments were a
clear call for reforms which could help Algeria to increase
production and offset a fall in global oil prices that has
sharply reduced its energy revenues.

"We are talking to the government to make it more attractive
for investment, I understand that taxes, and exploration legal
framework, need to be changed," he told reporters.

He also said ENI and Total were currently
in negotiations over large projects, including in field output
optimisation, petrochemicals and solar energy at oil and gas
fields.

Any move to amend Algeria's existing hydrocarbon framework
would be a major shift and changing the law could face
resistance from an old guard wary of ending nationalist policies
established under President Abdelaziz Bouteflika.

Last year, Algeria, a major gas supplier for Europe, held
talks with European Union officials and companies to discuss how
to improve investment and guarantee Algeria's gas supplies after
several years of stagnant production.

Some foreign energy companies have balked at investing in
Algeria, where tough contract terms, bureaucratic delays and
security concerns have made investors unenthusiastic, especially
after low oil prices made some projects financially unviable.

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More recently though, Sonatrach has taken a more flexible
approach with foreign companies, entering into more bilateral
negotiations rather than holding bidding rounds as a way to draw
investors back to its oil and gasfields.

Algeria expects its gas exports to reach 57 billion cubic
metres (bcm) this year, up from 54 bcm in 2016. Its output rose
to 132.2 bcm in 2016 from 128.3 bcm the previous year.

Analysts have often questioned Algeria's energy policies
given the quick turnover at Sonatrach management and the oil
ministry. Before Ould Kaddour, the former CEO was in place for
two years and Sonatrach had five CEOs in five years before that.

"I want a strategy for Sonatrach, it never had a strategy
before. I will publish shortly what I called Sonatrach 2030, a
plan that will show the way for the next decade," the Sonatrach
chief said.
(Writing by Patrick Markey. Editing by Jane Merriman)